Tycoon tales in a tiny cottage industry: The miniature cottages were not John Hine's idea, and now he wonders how he let them become a business worth pounds 20 million. Report by John Windsor

John Windsor
Friday 21 August 1992 23:02

JOHN HINE took the priority telephone call in his office. 'dollars 1.92?' he said, quietly. 'OK, let's go for it.'

It is hardly an office. He calls it 'my room'. Over the mantelpiece, beneath the 16th-century timbers of Eggars Hill, a restored manor house in Aldershot, Hampshire, hangs a passable version of Reynolds' portrait of Mrs Siddons. There are sofas that swallow you whole. As I entered, two golden retrievers stopped gambolling on the carpet and posed as if thinking that a country style magazine had sent me to meet them.

The call was from Mr Hine's currency broker. Mr Hine explained: 'I've just 'sold forward' a million dollars for February 1993 at dollars 1.92 to the pound.'

Big companies trading internationally are obliged to 'discount' foreign currency - paying now for currency they will not need until later. Otherwise, disadvantageous fluctuations in the exchange rate could turn profit into loss.

Mr Hine's turnover has risen to pounds 20m in 13 years. 'This currency dealing is a ludicrous game,' he said, 'It turns businessmen into punters. I feel as if I'm being chased into a betting shop.'

You might agree that such a man deserves a therapeutic outbreak now and then. Mr Hine did once hire a skip, club hammers and protective goggles, and smashed to smithereens 4,000 of those twee miniature cottages of the kind sold by Harrods. As it happens, those miniature cottages are his livelihood. He invented them.

The ones he smashed, two years ago, were all of 'The Grange'. It had metal balconies that kept falling off, and he had doubled the price to discourage sales. American retailers grumbled. In a fit of pique, he announced that 'The Grange' had been withdrawn from sale.

After his cottage cull, when his wife, Rosie, served tea, he plonked the single remaining Grange on the tray and said: 'There's your tip: pounds 1,000.' The retail price of 'The Grange' had been pounds 60 or dollars 120. The pounds 1,000 (dollars 2,000 in the US) is the price collectors will pay for one of the surviving 1,500-2,000 models.

That is not the highest price paid for David Winter miniature cottages, named after their sculptor. A staggering dollars 42,000 changed hands for a single specimen outside the collectors' convention centre in Long Beach, California, in April last year, when representatives of 'Mrs X', of Maidenhead, handed over to the buyer, an American airline pilot, probably the only surviving copy of 'Provencal II', a French-style cottage launched and withdrawn in the same year, 1981. It had been bought for Mrs X by her children as a Mother's Day present for pounds 7.50.

The New York Gift Show's 'David Winter' section included all makes of miniature cottages, thus giving the name generic status. Mr Hine's David Winter cottages are now one of the three fastest- appreciating, contemporary, limited-edition collectables in the United States. They vie for 'best collectible' (Americans spell it with an 'i') prizes at trade conventions with delicate glazed pastel- coloured Lladro figures from Spain and 'Precious Moments', whimsical cherub- like creatures sculpted by Sam Butcher. David Winter models have been recommended by a Los Angeles television news network as a better bet than the stock market.

Among other high-priced examples are 'Little Mill', which retailed at pounds 4.50 when 'retired' in 1983 and now finds buyers at dollars 3,200, and 'The Coaching Inn', pounds 36 in 1983 and now changing hands for dollars 4,500 to dollars 6,000. A complete collection of all 146 David Winter pieces would be worth at least dollars 200,000.

Anyone who paid an 'issue price' of pounds 7.50 for a hitherto undiscovered 'Provencal II' or a maximum pounds 70 for any of the other 70-odd pieces retired since 1980 (and who may now be tempted to whisk them back from granny) can have the last laugh over those collectors of genuine antiques who would never be seen dead with such things. Even early 19th-century Staffordshire figures (which, in their day, were similarly regarded as cheap 'n' cheerful) seldom exceed pounds 1,000 at auction.

You might imagine that Mr Hine's folksy, hand-painted gypsum models were carefully market-researched and targeted. Not at all. The market knocked at the door of his first workshop, a coal- shed, and has given him and Mr Winter no peace ever since. Instead of restricting output to that of a cottage industry - and jacking up the prices - Mr Hine, now 54, has struggled to satisfy a mass market. He sometimes wonders whether it was worth it. There are now 132 other makers of miniature houses in the market, prices are keen and dirty tricks abound, notably in the US.

His closest UK rival, Lilliput Lane, founded 10 years ago, claims a turnover of pounds 13m; it is undercutting him in price (it supplies Ratners) but lacks the cachet of named artists.

The people sticking the noughts on David Winter prices are not retailers but private collectors - buyers in the so- called 'secondary' or second-hand market, mainly in the US. There, the David Winter Cottages Collectors Guild has 50,000 members, half of whom speculate in the secondary market.

Mr Hine's first inkling of a secondary market came with a telephone call from his West Coast representative five years ago. 'Congratulations] You've won 'best collectible' at Pasadena]'

Mr Hine was astonished. He asked: 'What is Pasadena and what is a 'collectible'?' Pasadena is the venue of the California Plate and Collectible Show. And the US word 'collectible' signifies, according to Mr Hine, 'a piece which will increase in value once manufacture stops - that's their only definition'.

Hence the smashing of the 4,000 'Granges'. Mr Hine had forgotten, when announcing its retirement to US dealers, that his production run still had 4,000 unfinished 'Granges' in it. Any hint of premature retirement, he said, would have meant hundreds of them 'going walkies' in anticipation of a big jump in value. So all 4,000, finished and boxed as if for sale, were locked up until the skip and the club hammers arrived.

Unscrupulous American makers of limited-edition collectables manipulate the secondary market, Mr Hine said. They may, for example, go through their inventory and suddenly 'find' 600 pieces of an item they retired years earlier. The secondary price has, of course, risen since retirement. The manufacturer sticks a high price tag on to each of the miraculously discovered 600 pieces and earns a lot of money. But the sudden increase in supply deflates the secondary price, to the discomfiture of collectors who bought at peak.

Mr Hine said: 'We don't muck about with the secondary market. The day we do that is the day the David Winter market goes pouff.'

His first genuinely limited edition was this year's 'The Mad Baron', one of his many fantasies, whose sale was time-limited between 15 June and 15 July. Guild members - 'They join so they can talk money' - get two exclusive pieces a year and seem content with a dozen or so retirements a year.

Dirty tricks by rival US makers also include whispering campaigns that, for example, 'The Grange' is to be reissued, or that Mr Hine and David Winter are gay. Mr Hine and Mr Winter (the son of Faith Winter, who sculpted the 'Bomber' Harris and Lord Dowding statues) have had to scotch such rumours during their visits to the big biennial collectables shows in South Bend, Indiana, and Long Beach, California, and at Guild conventions.

The curious stories go back to the company's earliest inspiration. That came 13 years ago from a retired Royal Navy commander, the proprietor of a shop in Brighton called Gay Gifts. He insisted that Hine and Winter's original product, miniature heraldic shields, would never sell and insisted on - do not giggle - cottages.

Mr Hine had just sold his garden centre and developed a miniature pottery product using crystacal, a refined form of natural gypsum that can be cast from moulds without the glazing or firing which obliterates detail. Every brick and tile on a David Winter cottage is meticulously sculpted. Drying was a problem: damp cottages stacked on radiators at home made the air so humid that the walls and his wife's shoes and handbag sprouted mould.

Three US gift shops, in Seattle, Los Angeles and Napa Valley, California, tracked him down at his first craft centre between Guildford and Farnham. They wanted about 30 cottages each. Then Chinacraft, the British retailer, placed a pounds 6,500 order for 1,000 pieces.

Mr Hine surmises that in the US at the time, the early Eighties, the bottom was falling out of the limited-edition collectable plates market and disappointed collectors were ready to switch into a new kind of collectable pottery.

From then on it was like a roller- coaster. A pounds 60,000 loan from his high street bank ('Merchant banks don't yet understand collectables but our clearing bank knows us inside out.'); acquisition of a 1,500sq ft factory in Bordon, Hampshire, converted from a laundry; house- to-house leaflets in search of 2,000 home workers to paint cottages (later reinforced by 100 full-timers); 192 consecutive banking days when the cashier telephoned to tell him how much money he needed to raise to avoid going bust; anxious moments sitting in his car collecting cheques from sales reps as the last minutes of banking hours ticked away; seeing turnover rise from pounds 200,000 to pounds 1.75m in less than three years; opening a 25,000sq ft factory in Wrexham, North Wales, with the help of a pounds 750,000 government grant . . .

And now? The turnover is rising, but so is the bank loan: it is now pounds 5m. Mr Hine said: 'Since we went for expansion we haven't really made a profit. Up to pounds 10m turnover we were 20 per cent profitable; between pounds 10m and pounds 20m we weren't. We've had a break-even situation for the past goodness-knows-how- many years. The business seems to be feeding on itself.

'It seemed so terribly important to expand. But if I'd had the wisdom or the experience I might have said: 'This is jolly nice, it's small and containable - let's leave it at that.' But we went for growth and I'm not sure why. We did not know the price we would have to pay in terms of the quality of life.' He sighed: 'It hasn't been a bundle of fun. The first five years were, but after that . . .'

But if cash flows are boring, there is always the dressing up, theatricals and music that Mr Hine has made part of the business. At conventions he has appeared as Scrooge to publicise the firm's Dickens collection. He managed to get on television, advising viewers to hoard David Winter cottages in their garages and become mega-rich.

He also composes 'middle-of-the- road classical' music. In 1988, it earned him royalties of pounds 306. Now there is something that could be kept small and manageable.

(Photograph omitted)

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